Court Rules in Favor of Einhorn in Apple Dispute
Technology Editor, CNBC.com
A federal judge ruled in favor of David Einhorn and Greenlight Capital Friday in the dispute with Apple about the tech giant's proxy filing.
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Shareholders will not be able to vote on Apple's proposal No. 2 on its proxy filing on Wednesday when Apple hosts its annual shareholder meeting.
The judge is requiring both parties to submit a joint letter that outlines the next contemplated steps in the case by March 1.
Apple responded in a statement, saying: "We are disappointed with the court's ruling. Proposal #2 is part of our efforts to further enhance corporate governance and serve our shareholders' best interests. Unfortunately, due to today's decision,shareholders will not be able to vote on Proposal #2 at our annual meeting next week."
Einhorn's hedge fund sued Apple earlier this month in his efforts to block proposal No. 2 of the proxy, which he said would kill the issuing of preferred stock. According to Greenlight's lawsuit, Apple "bundled" three proposed amendments to its charter, which violates regulatory rules.
Apple argues that the proposal did not block the issuance of preferred stock, but instead requires a shareholder vote before preferred stock can be issued.
Einhorn's lawsuit, though, is part of a broader effort to force Apple to distribute some of its $137 billion cash load. He said earlier this month that Apple's cash hoarding was like ""someone who's gone through traumas … they sometimes feel they can never have cash."
Apple denied allegations of cash hoarding and CEO Tim Cook said Einhorn's lawsuit was a "silly sideshow."
Thursday Einhorn hosted a public conference call to explain his ideas for ways Apple could distribute some of its cash to shareholders. He said his plan could boost the stock price by as much as $150.
(Read More: Einhorn: My Plan Could Boost Apple Stock by $150 )